LONDON, Dec 16 (Reuters) - The British government on Thursday won the latest round of its legal battle to end tobacco advertising ahead of a European Union deadline but was prevented from instating the ban immediately.

The Court of Appeal, by a two to one majority, overturned a High Court ruling that government moves to bring in the European Tobacco Advertising directive before July 2001 were not justified. But the way is still not clear for the government to introduce the ban as planned in January. Imperial Tobacco Group Plc (quote from Yahoo! UK & Ireland: IMT.L), Gallagher Group Plc (quote from Yahoo! UK & Ireland: GLH.L), British American Tobacco Plc (quote from Yahoo! UK & Ireland: BATS.L) and Rothmans UK -- now part of British American Tobacco -- were refused leave to appeal to the House of Lords, Britain's highest court. But they pledged to petition the Appelate Committee in the Lords to ask it to consider the case and grant leave to appeal. Until that happens, the Appeals Court has stayed any implementation of the tobacco advertising ban. The decision was welcomed by the government. ``This is a victory for public health,'' Health Secretary Alan Milburn said in a statement. ``Banning tobacco advertising is widely supported both by the public and the medical profession. Now we have the backing of the courts.'' David Swan, chief executive of the Tobacco Manufacturers' Association, said the industry was ``disappointed by the decision'' but added that it was significant it not unanimous. ``It is gratifying that each of the Court of Appeal judges agreed that the tobacco manufacturers' case against the validity of the European directive was strong, and Lord Justice Laws went as far as to say that the directive was 'plainly unlawful','' Swan said in a statement. ``We are confident that the ECJ (European Court of Justice) will agree when it rules on the validity of the directive towards the end of next year.'' The four tobacco companies had argued in the High Court that Britain should not jump the gun on the EU's July 2001 deadline for the advertising ban, particularly as it had yet to be fully tested in the European Court of Justice. The High Court said that if the ban was implemented early in Britain and then the European court challenge succeeded, damages would not provide adequate compensation for the tobacco firms. But, in overturning the October 29 decision, Lord Justice Ward said he considered there was legitimate public interest within the EU over the health dangers of smoking and that it was legitimate for this interest to be promoted. ``That means that the public health interest outweighs the chaos and confusion which assaults, but does not obliterate, the rule of law,'' he said. ``Thus the balance now tilts in the Secretary of State's favour and it would therefore be inappropriate to restrain the government from doing what at the moment it is entitled to do.'' The lone dissenting judge, Lord Justice Laws, said he would have dismissed the government's challenge. Lord Justice Woolf, who formed the majority with Lord Justice Ward, said the case involved the important principle of the freedom of government to legislate in the public interest. He said the tobacco companies placed considerable importance on freedom of expression. But he said this was not an unqualified right and that if the directive relating to the ban was valid, a human rights argument could not be advanced to challenge the ban.

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